The Telegraph
Tether’s U.S. dollar stablecoin has experienced its most significant decline since the FTX collapse during the lackluster crypto market of 2022.
On-chain analytics revealed that Tether’s stablecoin (USDT) suffered a dip of about 1.2% in its market cap this week, coinciding with the implementation of EU digital asset regulations on December 30.
The market cap of the token dropped from its December high of $140 billion to $137 billion, igniting concerns regarding Tether’s future and the possible volatility of USDT. Speculations have emerged that the operator of USDT may exit the European Union following the enforcement of new regulations.
Nevertheless, industry leaders and analysts countered the negative social media sentiment, pointing to data that underscores USDT’s robustness beyond the EU.
A Non-Issue
Experts have repudiated claims that the EU’s Markets in Crypto-Assets Regulation would disrupt USDT’s operations. Karen Tang, head of APAC partnerships at Orderly Network, along with social media analyst Axel Bitblaze, highlighted that USDT continues to dominate in Asian and U.S. markets.
According to Bitblaze, around 80% of USDT’s trading volume is generated in Asia. Tang posited that the MiCA regulations are more likely to stifle the EU’s own market, hindering the growth of digital assets due to “complex excessive regulation.”
Tether’s Path to MiCA Compliance
MiCA mandates that stablecoin operators secure specific licenses for e-money tokens as well as trading asset-referenced tokens like USDT. So far, Circle (USDC) is the only major stablecoin issuer to acquire a MiCA license.
Tether has invested in EU-based firms such as StablR and Quantoz in preparation for regulatory compliance. CEO Paolo Ardoino has stressed that the company does not plan to withdraw from the EU. Although USDT cannot be traded on MiCA-compliant exchanges at this time, traders can still hold the stablecoin in non-custodial wallets as a temporary measure.
